Zwerling v. Ford Motor Company

District Court, N.D. California·Decided April 10, 2023·No. 5:19-cv-03622·Unknown

Opinion

PHILIP ZWERLING, Case No. 5:19-cv-03622-EJD

Plaintiff, ORDER GRANTING MOTION TO DISMISS v.

FORD MOTOR COMPANY, et al., Re: ECF No. 106 Defendants.

Plaintiff Philip Zwerling asserts claims against Defendants Ford Motor Company (“Ford”) and Does 1-10 for (1) breach of express warranty, (2) fraud by omission, (3) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. (“MMWA”), and (4) violation of the Texas Deceptive Trade Practices-Consumer Protection Act, Tex. Bus. & Com. Code § 17.41 et seq. (“DTPA”). Second Am. Compl. (“SAC”), ECF No. 100. The Court previously dismissed Zwerling’s complaint with leave to amend. See Order Granting Mot. for Judgment on the Pleadings (“Prior Order”), ECF No. 97. Zwerling then filed his SAC. Now before the Court is Ford’s motion to dismiss the SAC for failure to state a claim under Rule 12(b)(6). Mot. to Dismiss (“Mot.”), ECF No. 106. The Court finds the motion appropriate for decision without oral argument. Civil L.R. 7-1(b). Having considered the parties’ submissions, the Court GRANTS the motion to dismiss. Ford is a motor vehicle manufacturer organized under Delaware law, and Zwerling is a California resident. SAC ¶¶ 2, 4. On October 26, 2013, Zwerling purchased an F-350 Super Duty SRW diesel-engine vehicle manufactured by Ford. Id. ¶¶ 5-6. Allegedly, the vehicle contained one or more defects in its diesel engine or exhaust system (the “Exhaust System Defect”). Id. ¶ 17. The Exhaust System Defect purportedly caused the vehicle’s exhaust system to clog and led to reduced engine performance or loss of engine power. Id. Before Zwerling purchased his vehicle, he reviewed marketing and promotional materials from Ford, which failed to disclose the Exhaust System Defect. Id. ¶¶ 7, 79, 103. According to him, he would not have purchased his F-350 if Ford had disclosed the Exhaust System Defect. Id. As a consequence of the alleged defect, Zwerling’s vehicle has had a long repair history. The Prior Order contains a detailed summary of that repair history, and the Court will not repeat it in full here because the allegations regarding that history have largely not changed. See Prior Order at 2-3. The SAC includes only a single new allegation about repairs, describing an October 17, 2018 service appointment where a Ford technician evaluated the vehicle’s regeneration function—a feature that burns off soot from the exhaust filter so that it does not become plugged. SAC ¶¶ 15, 40. Otherwise, the primary additions to the history of Zwerling’s vehicle are allegations regarding occasions when he brought his vehicle to a repair facility for routine maintenance. Id. ¶¶ 29, 31-34, 36. In total, he now describes six new instances of routine maintenance between April 24, 2014 and July 25, 2018, each of which involved refilling diesel exhaust fluid and resulted in charges ranging from $25 to $430. Id. Following that lengthy sequence of repairs, on January 30, 2019, Zwerling contacted Ford to request that it buy back his vehicle under its lemon law obligations. Id. ¶ 42. When Ford refused, he then reached out to Ford’s BBB Autoline program in April 2019, but that program declined to assist Zwerling as well, citing the vehicle’s age. Id. ¶ 43. Shortly thereafter, on May 6, 2019, Zwerling filed this action in the Superior Court for the County of Santa Clara. Compl., ECF No. 1-2. On June 21, 2019, Ford removed the action to this Court. Notice of Removal, ECF No. 1. The parties stipulated to amendment, and on May 18, 2021, Zwerling filed his First Amended Complaint (“FAC”), ECF No. 39. Among other amendments, Zwerling added a new claim for violation of the MMWA. Compare FAC, with Compl. After answering, Ford moved for judgment on the pleadings, and on March 14, 2022, the Court granted its motion with leave to amend. Answer to FAC, ECF No. 41; Mot. to Dismiss FAC,1 ECF No. 42; Prior Order. Zwerling filed the operative SAC on April 4, 2022,2 adding new claims for breach of express warranty and violation of the DTPA. Compare SAC, with FAC. The instant motion to dismiss followed on April 19, 2022. See Mot. In his SAC, Zwerling raises claims for breach of express warranty, fraud by omission, violation of the MMWA, and violation of the DTPA. SAC ¶¶ 45-115. These claims fall under three general categories. First, his fraud by omission and DTPA claims relate to alleged omissions and misrepresentations by Ford that purportedly misled Zwerling about the defects present in his vehicle. Second, his express warranty and MMWA claim relate to breach of a repair warranty in which Ford refused to pay for repairs. And third, his MMWA claim also relates to breach of the implied warranty of merchantability stemming from the presence of defects in his vehicle. A motion to dismiss for failure to state a claim “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Factual allegations must be enough to raise a right to relief above the speculative level,” Twombly, 550 U.S. at 555, but courts are not required to accept conclusory allegations as true. Ashcroft, 556 U.S. at 678. Claims sounding in fraud must also meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102-03 (9th Cir. 2003); San Miguel v. HP Inc., 317 F. Supp. 3d 1075, 1084 (N.D. Cal. 2018). Under Rule 9(b), a party “must state with particularity the circumstances constituting fraud.” Typically, Rule 1 Although Ford styled its motion as a “Motion to Dismiss,” procedurally it functioned as a motion for judgment on the pleadings. 2 The SAC was filed on April 5, 2022 due to technical issues with ECF. Decl. of Dara Tabesh, ECF No. 102 ¶¶ 3-6. The Court then granted Zwerling’s request to deem the SAC filed as of April 9(b) requires the party alleging fraud to plead “the who, what, when, where, and how” of the misconduct. Vess, 317 F.3d at 1106 (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). For claims based on fraudulent omissions, the Rule 9(b) standard is “somewhat relaxed,” Clark v. Am. Honda Motor Co., 528 F. Supp. 3d 1108, 1122 (C.D. Cal. 2021) (quoting Asghari v. Volkswagen Grp. of Am., Inc., 42 F. Supp. 3d 1306, 1325 (C.D. Cal. 2013)), but a plaintiff must still “describe the content of the omission and where the omitted information should or could have been revealed.” Browning v. Am. Honda Motor Co., 549 F. Supp. 3d 996, 1012 (N.D. Cal. 2021) (quoting Sims v. Kia Motors Am., Inc., No. SACV 13-1791-AG (DFMx), 2014 WL 12558251, at *4 (C.D. Cal. Oct. 8, 2014)). A. Scope of Leave to Amend When the Court issued its Prior Order, it granted leave to amend “to address the deficiencies described.” Prior Order at 18. Ford argues that Zwerling therefore did not have leave to add new claims and that his DTPA claim must be dismissed.3 Mot. at 16-17. In response, Zwerling argues that he had leave to add Texas claims because the Prior Order determined, for the first time in this matter, that Texas law applied. Opp’n to Mot. (“Opp’n”), ECF No. 112, at 20-21. Ford is correct that courts in this district have determined plaintiffs may not add new claims when a

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